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Official investigation into CBA launched
The Commonwealth Bank’s governance and accountability practices will be examined by an independent inquiry after a number of recent incidents have raised concerns around the banks’ culture.
Official investigation into CBA launched
The Commonwealth Bank’s governance and accountability practices will be examined by an independent inquiry after a number of recent incidents have raised concerns around the banks’ culture.
The inquiry will be helmed by a panel selected by APRA, and will be focused on identifying “any shortcomings in the governance, culture and accountability frameworks and practices” within the Commonwealth Bank (CBA) and whether any of its management or remuneration practices don’t conflict with good management.
“The overarching goal of the prudential inquiry is to identify any core organisational and cultural drivers at the heart of these issues and to provide the community with confidence that any shortcomings identified are promptly and adequately addressed,” said Wayne Byres, the CEO of APRA.
Mr Byres said trust in Australia’s banks had been damaged over the past few years, and that CBA in particular has been affected by this growing negative sentiment.
“CBA is a well-capitalised and financially sound institution. However, beyond financial measures, it is also critical to the long-run health of the financial system that the Australian community has a high degree of confidence that banks and other financial institutions are well governed and prudently managed,” he said
“A key objective of the inquiry will be to provide CBA with a set of recommendations for organisation and cultural change, where that is identified as being necessary.”
Mr Byres’ remarks about Australia’s falling confidence in the country’s banking sector is also supported by data released this morning by the Australian Bankers’ Association (ABA), which showed “low levels of trust, confidence and transparency in the banking industry with a clear need for improvement.”
The ABA’s chief executive, former Queensland premier Anna Bligh, said the research they had commissioned found more needed to be done to build the community’s trust in banking, and as such the industry will continue its own efforts to improve.
“Along with federal government reforms such as the new Banking Executive Accountability Regime, a new one-stop shop for complaints and substantial improvements to contracts for small business lending, the industry has initiated its own reforms which include a new Code of Banking Practice, new whistleblower protections and changes to staff remuneration,” Ms Bligh said.
“It’s a big program of transformation and future benchmarking will look at the full breadth of changes that are underway.”
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